United States District Court, D. Kansas
MEMORANDUM AND ORDER
D. Crabtree, United States District Judge.
Scott Gregory Hattrup filed suit against the United States,
Julia Deng, and John Doe to secure quiet title relief and an
injunction to extend the redemption period arising from the
judicial sale of his former property. Doc. 1 at 1. Only the
claims against defendant Deng remain. The claims against the
United States and John Doe have been dismissed.
contends he was denied due process because he did not receive
post-sale notice from the Internal Revenue Service
("IRS") after the sale of his property. He now
seeks injunctive relief and quiet title relief against
defendant with respect to the quit claim deed issued by the
IRS to defendant. And, he asserts a right to redeem his
matter comes before the court on three motions. Defendant has
filed a Motion for Summary Judgment (Doc. 31). Plaintiff also
has filed a Motion for Summary Judgment (Doc. 34). And,
defendant has filed a Motion to Supplement (Doc. 37).
seeks summary judgment against each of plaintiff s claims.
Docs. 31 & 32. Plaintiff has filed a Response (Doc. 36),
and defendant has submitted a Reply (Doc. 38). Plaintiff
seeks summary judgment on his injunctive and quiet title
claims as well. Doc. 34. Defendant has filed a Memorandum in
Opposition (Doc. 35). And, the time for plaintiff to file a
reply has expired. Also, plaintiff has not filed any response
to defendant's Motion to Supplement and the time to do so
has expired. The matters thus are fully briefed, and, after
considering the parties' arguments, the court now is
prepared to rule.
reasons explained below, the court grants defendant's
Motion for Summary Judgment (Doc. 31) and Motion to
Supplement (Doc. 37). The court denies plaintiffs Motion for
Summary Judgment (Doc. 34).
following facts are either stipulated by the parties in the
Pretrial Order (Doc. 30) or are uncontroverted for purposes
of the parties' summary judgment motions.
Property at Issue and the IRS Sale
and throughout 2016, plaintiff was the owner of, and resided
in, the residence located at 11925 West 92nd Terrace, Lenexa,
Johnson County, Kansas 66215 (the "Residence"). The
IRS filed a tax lien and notices of the lien against the
Residence at various dates from 2005 to 2012.
sought and received approval for a judicial levy on the
Residence in a related suit before our court, In the
Matter of Tax Indebtedness of Scott G. Hattrup, Case No.
15-mc-219-CM (D. Kan. 2015). The judicial levy was approved
on February 10, 2016. The IRS provided plaintiff with a
Notice of Seizure of the Residence on or about April 27,
2016, on Form 2433, as required by 26 U.S.C. § 6335(a).
The IRS provided plaintiff with a Notice of Public Auction
Sale on or about August 24, 2016, on Form 2434 ("Form
2434"),  as required by 26 U.S.C. § 6335(b),
which listed October 6, 2016, as the intended sale date.
of Form 2434, delivered to plaintiff, identified the date,
time, and place the sale was to occur. It also identified the
name and contact information for the Property Appraisal &
Liquidation Specialist ("PALS"). It identified
Jennifer L. Breuchaud as the PALS and provided her email
address. Page 1 also gave an "Address for information
about the sale" as 380 Office Ct, Fairview Heights,
Illinois 62208 and provided a phone number.
of Form 2434 stated the redemption rights before sale, per
Section 6337(a) of the Internal Revenue Code. Page 2 also
stated the redemption rights after the sale, per Section
6337(b) of the Internal Revenue Code, including a notice that
the right of redemption runs for 180 days after the sale, and
that the price of redemption is the amount paid at the sale
plus interest on that price at 20% per annum.
sale took place on October 6, 2016. Ms. Breuchaud-the PALS
identified on Form 2434-conducted the sale. Plaintiff did not
attend the sale. Defendant attended the sale and was the high
bidder. Defendant bid $40, 000 at the sale, and, as the high
bidder, paid the IRS $40, 000 that same day.
Encumbrances on the Residence
sale "was conducted 'subject to any prior valid
outstanding mortgages, encumbrances, other liens in favor of
third parties against the taxpayer that are superior to the
lien of the United States."'' Doc. 36 at 2
(quoting Form 2434, Doc. 32-1 at 2 (emphasis in original)).
The Residence was offered for sale '"where is'
and 'as is' and without recourse against the United
States." Id. (quoting Form 2434, Doc. 32-1 at
sale of the Residence was subject to senior encumbrances held
by the Johnson County Treasurer and by the Kansas Department
of Revenue, both agencies of the State of Kansas. The Johnson
County Treasurer and the Kansas Department of Revenue were
not parties to the judicial levy action in federal court, nor
were they identified as parties receiving notice of the
judicial levy action.
County had scheduled a sale of the Residence for November
2016 for payment of the delinquent property taxes. The buyer
at the October 2016 IRS sale was responsible for paying
delinquent property tax before the Johnson County sale. Form
2434 referred to "Approx $60, 138.49 in senior
encumbrances that will be paid by the buyer." Doc. 32-1
at 1. It also referenced the planned November 2016 Johnson
County sale, explaining "the buyer at the 10/6/16
auction will be responsible for payment of delinquent
property tax to the County before the County Sale."
Id. As explained below, this Johnson County sale did
not take place and defendant did not pay the delinquent
property taxes before November 2016.
Activity During the Redemption Period
the sale, the IRS issued defendant a Certificate of Sale of
Seized Property.Ms. Breuchaud handed this certificate to
defendant the day of the sale. Ms. Breuchaud signed the
certificate in her capacity as an IRS employee. The IRS also
gave defendant a letter dated October 6, 2016, notifying
defendant that plaintiff had 180 days after the sale to
redeem, that the redemption period ended April 4, 2017,
and-if the property was not redeemed-that the IRS would issue
defendant a quit claim deed in exchange for the surrender of
the Certificate of Sale of Seized Property and a statement
from her that the property had not been
redeemed. Ms. Breuchaud also handed this letter to
defendant the day of the sale. This letter was signed by Ms.
Breuchaud in her capacity as PALS.
between the October 6, 2016 IRS sale and the Johnson County
sale scheduled to take place in November 2016, defendant
contacted the Johnson County Treasurer's Office to have
the sale cancelled. Later, as explained below, defendant paid
the delinquent property taxes owed to Johnson County.
only correspondence, documents, or emails that plaintiff
received from the IRS at any time between the date of sale on
October 6, 2016, and expiration of the 180-day redemption
period in April 2016, was an untitled demand for interest,
which plaintiff received approximately January 17, 2017, or
shortly thereafter. This demand did not mention that the sale
had occurred or that the redemption period had commenced.
Plaintiff did not send any correspondence, documents, or
emails to the IRS (other than any personal tax return or
estimated tax filing) at any time during the redemption
period. Plaintiff did not communicate orally (whether in
person or over the phone) with any employee or representative
of the IRS at any time during the redemption period about the
Residence or the IRS auction of the Residence.
the date of sale and expiration of the 180-day redemption
period, the IRS did not notify plaintiff the sale had
occurred or that the redemption period had commenced. Between
the date of sale and expiration of the 180-day redemption
period, plaintiff did not learn the sale had occurred or that
the redemption period had commenced.
Activity After the Redemption Period
the 180-day redemption period had expired, defendant
surrendered the Certificate of Sale of Seized Property to the
IRS. In exchange, the IRS issued her a quit claim deed to the
Residence. Defendant recorded the quit claim deed
with the Johnson County, Kansas, Records & Tax
Administration on May 15, 2017. After recording the quit
claim deed, defendant went to the Johnson County, Kansas,
Treasurer's office on May 17, 2017, and paid $16, 682.40
for delinquent and then-current Kansas real property taxes
owed on the Residence for years 2011, 2012, 2013, 2014, 2015,
and 2016. Since then, defendant has paid the real property
taxes on the Residence for 2017 and 2018, making a collective
total of tax payments by defendant for years 2011 through
2018 of $21, 722.75. Defendant has not yet paid any amounts
for the lien filed by the Kansas Department of Revenue. That
lien remains on the title to the property.
contacted counsel, who issued plaintiff a notice-to-quit the
premises on May 17, 2017. Defendant hand-delivered her
counsel's notice-to-quit letter to plaintiff on May 17,
2017. The May 17, 2017, letter was the first
time plaintiff knew that the sale was completed on October 6,
did not quit the Residence as requested in the letter. So,
defendant initiated an eviction action in the District Court
of Johnson County, Kansas, titled Deng v. Hattrup,
Case No. 17LA3672. That court entered its judgment for
possession in favor of defendant on July 26, 2017. Plaintiff
appealed the decision to the Kansas Court of Appeals, Case
No. 118164. The Kansas Court of Appeals affirmed the Johnson
County, Kansas, District Court, in an unpublished opinion
dated June 15, 2018. Plaintiff filed a Petition for Review
with the Kansas Supreme Court on September 11, 2018. The
Kansas Supreme Court denied the Petition for Review on April
sent plaintiff a Form 3074 letter dated July 25, 2017,
enclosing (a) a Form 2436, Seized Property Sale Report,
showing how sale proceeds were applied to unpaid taxes, (b) a
Record 21, Record of Seizure and Sale, and (c) a Form 2434-B,
Notice of Encumbrances Against or Interest in Property
Offered for Sale. The letter indicates the documents enclosed
"provide a complete record of the seizure and sale as
required by Section 6340 of the Internal Revenue
Code. Doc. 35-7 at 1.
asserts he was denied due process under the Fifth Amendment
to the United States Constitution when the IRS failed to give
him post-sale notice that the sale was complete and his
redemption period had commenced. Plaintiff concedes he
received notice of the sale before the sale took place, but
he asserts this notice was insufficient because it did not
include enough information to allow him to redeem the
property after the sale, if the property indeed was sold at
the scheduled sale. Plaintiff believes he has a due process
right which "[a]t a legal minimum... includes receiving
the name and last known address of the purchaser, and the
amount of the sale, within a reasonable time after the sale
is concluded." Doc. 30 at 13. Because he did not receive
this notice, plaintiff contends he was denied his right to
redeem the Residence under 26 U.S.C. §6337.
parties agree 26 U.S.C. § 6337 and federal regulations,
procedure, and case law govern plaintiffs redemption rights.
Doc. 30 at 2. Plaintiff also argues Kan. Stat. Ann. §
60-2414-which provides for a 12-month redemption period-and
Kansas case law provide him additional redemption rights.
Id. But, defendant disagrees and argues Kan. Stat.
Ann. § 60-2414 does not apply here. Id.
seeks injunctive relief under Kan. Stat. Ann. §§
60-901n and 60-906 for the quit claim deed issued
by the IRS to defendant. He would like the quit claim deed
declared void or voidable and an opportunity to redeem the
Residence. Alternatively, he would like the IRS sale results
declared void or voidable. He also seeks quiet title relief
under Kan. Stat. Ann. § 60-1002. Plaintiffs
requested relief hinges on a finding that his due process
rights were violated or, alternatively, a finding that he is
entitled to the 12-month redemption period established by
Summary Judgment Standard
judgment is appropriate if the moving party demonstrates that
there is "no genuine dispute as to any material
fact" and that it is "entitled to a judgment as a
matter of law." Fed.R.Civ.P. 56(a); see also In re
Aluminum Phosphide Antitrust Litig., 905 F.Supp. 1457,
1460 (D. Kan. 1995). When it applies this standard, the court
"view[s] the evidence and make[s] inferences in the
light most favorable to the non-movant." Nahno-Lopez
v. Houser, 625 F.3d 1279, 1283 (10th Cir. 2010) (citing
Oldenkamp v. United Am. Ins. Co., 619 F.3d 1243,
1245-16 (10th Cir. 2010)).
issue of fact is 'genuine' 'if the evidence is
such that a reasonable jury could return a verdict for the
non-moving party' on the issue." Id.
(quoting Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 248 (1986)); see also In re Urethane Antitrust
Litig., 913 F.Supp.2d 1145, 1150 (D. Kan. 2012)
(explaining that "[a]n issue of fact is
'genuine' if 'the evidence allows a reasonable
jury to resolve the issue either way.'" (quoting
Haynes v. Level 3 Commc 'ns, LLC, 456 F.3d 1215,
1219 (10th Cir. 2006)). "An issue of fact is
'material' 'if under the substantive law it is
essential to the proper disposition of the claim' or
defense." Nahno-Lopez, 625 F.3d at 1283
(quoting Adler v. Wal-Mart Stores, Inc., 144 F.3d
664, 670 (10th Cir. 1998) (citing Anderson, 477 U.S.
moving party bears '"both the initial burden of
production on a motion for summary judgment and the burden of
establishing that summary judgment is appropriate as a matter
of law.'" Kannady v. City of Kiowa, 590
F.3d 1161, 1169 (10th Cir. 2010) (quoting Trainor v.
Apollo Metal Specialties, Inc., 318 F.3d 976, 979 (10th
Cir. 2002)). To meet this burden, the moving party
'"need not negate the non-movant's claim, but
need only point to an absence of evidence to support the
non-movant's claim.'" Id. (quoting
Sigmon v. CommunityCare HMO, Inc., 234 F.3d 1121,
1125 (10th Cir. 2000)); see also In re Urethane Antitrust
Litig., 913 F.Supp.2d at 1150 (explaining that "a
movant that does not bear the ultimate burden of persuasion
at trial need not negate the other party's claim; rather,
the movant need simply point out to the court a lack of
evidence for the other party on an essential element of that
party's claim." (citation omitted)).
moving party satisfies its initial burden, the non-moving
party '"may not rest on its pleadings, but must
bring forward specific facts showing a genuine issue for
trial as to those dispositive matters for which it carries
the burden of proof" Id. (quoting Jenkins
v. Wood, 81 F.3d 988, 990 (10th Cir. 1996)); see
also Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986);
Anderson, 477 U.S. at 248-49. "To accomplish
this, the facts must be identified by reference to
affidavits, deposition transcripts, or specific exhibits
incorporated therein." Adler, \AA F.3d at 671
(citing Thomas v. Wichita Coca-Cola Bottling Co.,
968 F.2d 1022, 1024 (10th Cir.), cert, denied, 506
U.S. 1013 (1992)).
court applies this same standard to cross-motions for summary
judgment. Each party bears the burden of establishing that no
genuine issue of material fact exists and that it is
entitled, as a matter of law, to the judgment sought by its
motion. Atl. Richfield Co. v. Farm Credit Bank of
Wichita, 226 F.3d 1138, 1148 (10th Cir. 2000).
Cross-motions for summary judgment "are to be treated
separately; the denial of one does not require the grant of
another." Buell Cabinet Co. v. Sudduth, 608
F.2d 431, 433 (10th Cir. 1979). But where the cross-motions
overlap, the court may address the legal arguments together.
Berges v. Standard Ins. Co., 704 F.Supp.2d 1149,
1155 (D. Kan. 2010) (citation omitted).
summary judgment is not a "disfavored procedural
shortcut." Celotex, 477 U.S. at 327. Instead,
it is an important procedure "designed 'to secure
the just, speedy and inexpensive determination of every
action.'" Id. (quoting Fed.R.Civ.P. 1).
facts here are not disputed, but both parties contend they
are right on the law and thus should prevail. The
parties' legal arguments and analysis in their cross
motions for summary judgment significantly overlap. Indeed,
plaintiffs response to defendant's motion directs the
court to his own summary judgment motion. See Doc.
36 at 2. The court thus addresses the legal arguments
seeks summary judgment against all of plaintiff s claims. She
relies on four arguments. First, defendant argues
plaintiff is not entitled to any of the injunctive or quiet
title relief sought because there was no due process
violation. Plaintiff also moves for summary judgment in his
favor based on this due process issue, asserting he is
entitled to prevail on his claims because he was denied due
process and deprived of his opportunity to redeem the
Residence. Second, defendant argues the redemption
period under 26 U.S.C. § 6337 cannot be extended, even
for equitable considerations, so plaintiffs injunctive relief
requesting an extension of time to redeem must be denied.
Third, defendant argues Kan. Stat. Ann. § 60-
2414(a) and its 12-month redemption period do not apply here.
Finally, defendant argues the equitable
relief-injunction and quiet title-sought by plaintiff should
be denied because plaintiff "slumbered on [his]
rights" and equitable relief is not available to those
"who deliberately forego the opportunity to discover
material facts." Doc. 30 at 15-16; see also
Doc. 32 at 11. The court addresses each argument, in turn,
Was plaintiff denied due process?
root of plaintiff s claims is the alleged due process
violation. Defendant argues she deserves summary judgment
against plaintiffs claims because plaintiff was not denied
due process. Defendant contends the IRS conducted the sale in
accordance with 26 U.S.C. §§ 6331 through 6344, 26
C.F.R. §§ 301.6331 through 301.6343, and the IRS
Manual concerning sales. Defendant points out that none of
these provisions require post-sale notice notifying the
property owner the redemption period has commenced. Defendant
further argues plaintiff has no constitutional right to
post-sale notice because the procedures followed by the
IRS-particularly Form 2434-provided plaintiff adequate notice
of his redemption rights. Doc. 32 at 13. Defendant contends
Form 2434 gave plaintiff "meaningful notice and
opportunity to act" because it gave notice of the date,
time, and place of the sale and advised that a 180-day
redemption period would apply if the property was sold. Doc.
30 at 12. Plus, defendant points out, Form 2434 provided
contact information for the IRS if plaintiff had questions
about the sale or redemption process. Id. But,
plaintiff did not attend the sale or use that contact
information to determine if the sale had occurred.
Id. Thus, defendant argues, plaintiffs due process
rights were not violated. Id.
does not dispute that the IRS followed the procedures set out
in the Internal Revenue Code, Code of Federal Regulations,
and IRS Manual. And, plaintiff does not contest that he
received Form 2434 prior to the sale. But, plaintiff
disagrees with defendant's contention that Form 2434
provided him adequate notice. Plaintiff argues that due
process requires notice both before and after the sale. Doc.
34 at 10. He contends the Due Process Clause of the Fifth
Amendment requires the IRS to provide the property owner
"notice of the results of the sale, and the information
which would allow Plaintiff to redeem the property, namely
the name, address, and winning bid amount from the
buyer." Doc. 36 at 2. The applicable statute allows for
redemption after a sale "upon payment to the purchaser,
or in case he cannot be found in the county in which the
property to be redeemed is situated, then to the Secretary,
... [of] the amount paid by such purchaser and interest
thereon at the rate of 20 percent per annum." 26 U.S.C.